March 6 (Bloomberg) -- Australia’s dollar rose against most major peers after data showed the nation’s economy grew last quarter, driven by household consumption and exports.
The currency, nicknamed the Aussie, climbed to its highest level in a week versus the yen as traders pared expectations for interest-rate cuts this year. New Zealand’s currency, known as the kiwi, declined for the first time in four days and the Aussie fell against the U.S. dollar after commodities fell for the sixth time in seven days.
“The previous quarter was revised higher, and the annual rate was lifted, so that’s a good outcome,” said Peter Dragicevich, a Sydney-based currency economist at Commonwealth Bank of Australia, the nation’s largest lender. “We’ve seen market pricing for more rate cuts by the RBA get pared back and that obviously helps support the Aussie.”
The Australian dollar fell 0.2 percent to $1.0238 as of 1:11 p.m. in New York, after advancing 0.6 percent yesterday, the most since Feb. 22. It gained 0.4 percent to 96.11 yen after earlier touching 96.29, the highest since Feb. 25.
New Zealand’s currency fell 0.3 percent to 82.84 U.S. cents after climbing 0.8 percent in the previous three days. It strengthened 0.3 percent to 77.76 yen.
Interest-rate swaps data compiled by Bloomberg show traders see a 75 percent chance the Reserve Bank of Australia will keep the overnight cash rate target at 3 percent when they next meet on April 2. That’s up from 29 percent odds a month ago.
Australia’s economy grew 0.6 percent in the fourth quarter from the previous three months, when it gained a revised 0.7 percent, a Bureau of Statistics report released in Sydney showed today. The result was in line with the median of 28 estimates in a Bloomberg News survey. The economy expanded 3.1 percent from a year earlier.
The RBA refrained from cutting the highest benchmark interest rate among major developed nations for a second-straight meeting yesterday, after Governor Glenn Stevens and his board implemented 1.75 percentage points in borrowing-cost reductions in the 14 months through December.
There are signs the “significant easing in monetary policy” last year is having an impact, Stevens said in a statement, while reiterating the inflation outlook allows “scope to ease policy further.”
“With an unchanged RBA and relatively solid growth, we would expect a short squeeze in the Aussie back above $1.03 over the next few days,” said Callum Henderson, the head of currency research at Standard Chartered Plc in Singapore. “We’re expecting an upturn in global growth in the second half of the year, and as such, for the RBA to refrain from its relatively dovish comments.”
The Standard & Poor’s GSCI Index of 24 raw materials fell 0.9 percent today, and is down 5.3 percent during the past month.
The kiwi fell even as prices of milk powder for May delivery rose 19.3 percent, the most since Sept. 1, 2010, according to a trade-weighted index on Fonterra Cooperative Group Ltd.’s GlobalDairyTrade website. Auckland-based Fonterra is the world’s biggest dairy exporter and accounts for about 40 percent of the global trade in dairy products.
To contact the editor responsible for this story: Rocky Swift at firstname.lastname@example.org